Samsung has announced a purchase agreement to acquire Harman International Industries, which will improve the presence and importance of the South Korean company in the market of connected technologies, particularly automotive electronics, which remains a strategic priority for Samsung.
Harman leads the market for connected vehicle solutions; in fact, almost 65% of its sales during the last year as of September 30, 2016 are related to the automotive industry.
Samsung wants to penetrate the connected vehicle sector, and now it has what it takes to do so
Although the purchase will not become effective at least until the middle of next year 2017, once authorities and shareholders give their approval, the South Korean company has already announced the agreement reached with the American company Harman International Industries, a acquisition agreement that, although it will maintain Harman's independence as a subsidiary of Samsung, it will allow this to increase its presence in the incipient sector of connected and self-driving vehicles, both due to the technology that the US company has already developed, as well as its strong relationships with some of the most important companies in the sector, including General Motors or Fiat.
Harman, a complement to Samsung worth 8.000 million
The acquisition agreement reached by Samsung and Harman amounts to $ 112 per share in cash, which is equivalent to a total value of about $ 8.000 billion.
"HARMAN perfectly complements Samsung in terms of technologies, products and solutions, and joining forces is a natural extension of the automotive strategy that we have been pursuing for some time," said Oh-Hyun Kwon, Vice President and CEO of Samsung Electronics.
In Samsung's view, this acquisition will bring it great growth opportunities as Harman's experience can be combined with the experience that the South Korean company has in connected mobility, user experience, semiconductors, screens and its global distribution channels. .
Growth opportunities
Harman has significant experience in designing and integrating advanced technologies in cars and already has deep relationships with some of the world's largest automakers. According to Samsung, this it will bring you great growth opportunities when combined with the experience that the company has in connected mobility, user experience, semiconductors, screens and its global distribution channels.
On the other hand, Samsung's leading position in consumer electronics, along with Harman brands and audio capabilities, will improve the user experience across Samsung's entire consumer and professional portfolio.
With this acquisition, Samsung will have access to Harman's 8.000 software designers and engineers who are working to develop the full potential of the IoT market (Internet of Things). The company will also have access to leading Harman brands and their next-generation audio systems such as Harman Kardon, JBL, Mark Levinson, AKG, Lexicon, Revel and Infinity. Harman is also licensed by Bowers & Wilkins and Bang & Olufsen for the use of the automobile. All of these brands, says Samsung, will greatly improve the competitiveness of its mobile division, screens, virtual reality and wearables products, since it will be able to provide a completely differentiated audiovisual experience to its customers.
Once this agreement has been closed, something that is expected by mid-2017 when the shareholders of both companies and the regulators have given their approval, Harman will operate as an independent subsidiary of Samsung and will continue to be led by the current team. Samsung's intention is to maintain Harman's workforce, its facilities, its headquarters, as well as all of its consumer and professional audio brands.
It is the first major operation carried out by Samsung after the debacle of the Galaxy Note 7 and when it is still immersed in its consequences.